The “Pips” Aren’t Squeaking.

 The “Pips” Aren’t Squeaking.  

Abstract:

The pips just aren't being squeezed or squeaking at all, they know when they are doing well and the poor pips are not squeaking enough, ignorant as they are of being squeezed dry to subsidise the rich, wealthy, businesses and outright evasion. The level of income spread over the past 30 years has become widely divergent and more income is flowing wealth into the hands of the top 12%. With this analogy, one is just trying to establish a base point from which to launch a view that indicates how the switch of the original meaning of the sentiment behind the expression was done to raise hostility to the very idea of it. The original full expression (see later) attempted to serve a rationale but the corrupted often used one, had a specific emotive purpose to stop any effective challenges to the devious hidden privileges of the wealth.

Read on:-

One has borrowed on old expression here and it is an expression that for many will be largely unknown and for a few it will have been understood and quoted deliberately wrong and one thinks, in that sense, the mistake is continuing. As the opportunity arises, it is to be propagated to a receptive audience by special interest sectors that do not wish to analyse the intention of the expression and serious issues behind it.

In essence, with this, one is just trying to establish a base point from which to launch an alternative point of view that indicates how the switch of the original meaning of the sentiment behind the expression was done to raise hostility to the very idea of it. The original expression attempted to serve a purpose but the corrupted often used one, had a purpose to stop any effective challenges to the devious hidden privileges of the wealth.

In some way the same misdirection and obscuration continues to be in practice today and generally from the same reasons, to stop active discussion that might lead to any successful implementation of corrective actions. And the subject that causes so much divertive attention, it is tax.

The expression one is referring to is often spouted as “Tax the rich until the pips squeak”. This sentiment, carefully used today on some occasions, was a deliberate misquotes to hype resistance to what was intended at the time it was said.  In a speech in Lincoln on 18 February 1974 to the labour party faithful, Dennis Healy attempted to make the country aware and the party to realise the financial predicament that the country was in and had to address. This was the often disguised degrading financial stability of the UK, was not helped by the lack of industrial competitive productivity, structural drag of historic politicking, managerial and workforce issues weighted for the inequality of taxation and benefits attached to property and of landed wealth. He said “"I warn you that there are going to be howls of anguish from those rich enough to pay over 75% on their last slice of earnings"  and in his speech he also said, the correct expression, to  "squeeze property speculators until the pips squeak."

It was true, in the 70s, that a very small number of people were hit with a 75% tax (highest was 83%) if they were unfortunate not to be slippery enough to mitigate their taxable income by avoidances. This level only lasted for 3 years and has since been ratcheted down. The highest rate of income tax was in the Second World War at 99.25%, reduced down to 90% over 50s/60s period, then in the late 60s/70s it gradually fell. Crucially in the conservative party’s election victory in 1979, thatcher dropped the high rate down to 60% eventually landing at 40% in 1988. The basic rate of 33%, over a number of budgets also came down to 25% in 1988. This rapid drop in direct taxation became a farcical race by government parties to be the best tax cutters with the medium rate just now at 20% - 45%. This was done as a means of bribing politicians into power however retrenchment in direct income taxation (excluding national insurance tax) also disguised the reduction in corporate and investment taxation rates and the rise in ‘hidden’ indirect taxation, as in purchase tax giving way to VAT and a range of new selective consumer service taxes.  

Healy’s real intent with his speech was to draw into the tax net the landed affluent and property speculators, this was overall in line with Labour party’s long held policy of the redistribution of income and wealth via equitable taxation. In this he did no more that highlight the distinction between both parties in the attitude to unearned wealth, tax and the limited ability to use taxation as a means of prosperity distribution on its own.  

With the metaphor he used in the expression, he was not the first to use “pips squeaks” metaphor, it was began by Sir Eric Campbell-Geddes and later used by David Lloyd-George, although it also appears that it may have been used at a much earlier time.

This use was a reputed reinterpretation of the Healy speech by The Times newspaper into the antagonistic "tax the rich until the pips squeak", (1&2) never the less it was a seminal media moment for the right wing press egged on by the munificent affronted wealthy and the Conservative Party and it started the rush to be the lowest tax provider to the deserving affluent.

It estimated that there are, in any one year, some 30.3 million tax payers with National Insurance contributions (NICs) and VAT being the three largest sources of revenues generating two thirds of tax receipts of £700 billion. The spread of payers, (from the Institute for Fiscal Studies - IFS) shows that about 90% of income tax is paid by the 50% of taxpayers with the highest incomes; while an estimated quarter of income tax is paid by the richest 1%.  It is this last figure that is tearfully played out to show how much the economy relies on the 300K generous rich to pay for public services and it is dependent on them reliably paying up; although it is a potential variable and risky reliance due to the latent mobility of the richest taxable incomes.    

Over the years the tax burden has been surreptitiously moved from the wealthy to the undeserving poor and the range of the overall tax take from all sources has increased.  It is the low to middle income earners that pay the most of all taxes (includes the entire hidden and unavoidable tax take) and as proportion of their overall income and asset wealth holdings, pays a disproportion larger amount of tax compared to the tiny 1% to 10%. This inequitable position is of course much more of an issue with anyone on minimum or average earnings or no income at all. For even though some people may not be within the taxable threshold limit, anyone by being a consumer of goods, property holder, energy user etc. the majority of the working (or non working) population contribute to the tax (revenue) take. And furthermore, unlike the wealthy / rich, do not have the ability to mitigate their liability or move to a different ‘beneficial’ tax regime.

From time to time much is always made of the ‘fact’ that the rich pay the most tax; this is wholly wrong and a deliberate misapplication of a ‘sympathy’ of importance intentions. What is irrefutably a fact is that over the years the tax on income and wealth of the rich has become less of a burden to them having reduced by 30% but for low to middle income earners the tax take has been spread but reduced only by approximately 13%. At the same time greater wealth and income has gone to the top 10% and due to the nature of accumulated wealth, they continue to get richer with no effort while incomes for the majority has declined.  

The continued battle to be (superficially seen as) the lowest taxing government has created a problem noted by the IFS were it indicates that alteration in the income tax range masks important changes in the composition of revenues, for income tax is due to raise a lower share of total taxes, more may then need to come from the top 1% of income tax payers, (this is the risk of instability) and as the tax revenue is set to raise less from fuel duties, overall revenue are now more reliant on smaller taxed pathways. However despite governments successfully disguising direct tax to alternative ones in the bribing voters for contained power with income tax cuts; over 5 successive governments, “from 1992 significant tax-raising measures were announced (despite these measures typically not featuring in the winning party’s general election manifesto)”, (3) this is the so called stealth taxes.

There is little in this that is new, much of the essence of it is readily available via many sources and any attempt to discuss a radical reform of the tax structure to make it equitable is shut down for two reason; tax is used as weapon against such a proposition making it a voting negative and the wealthy have a block on revenue raising ability aimed to continue to benefit themselves. As the IFS indicates, freezing a tax stream or reducing it, is not good policy and there are exacerbating developing inconsistencies in the tax portfolio yet it does not stop the need for government expenditure and to pay for it the tax / revenue required has to come from somewhere.

Now we have the same tax bribes being offered by the BOJO government right wing extremists, hell-bent on the overpowering Brexit delivery at any cost. The discovered available largess available for tax reduction and capital spends is being floated to blind economic common sense, distribution is to be opened to businesses and tax payers but these tax reductions are potentially from a much more aggressive optimistic perspective of what the country can afford and will have far reaching financial debilitating consequences, ultimately for individuals and the economy overall.

He is pledged to:-

 a) Raise tax threshold at which tax is paid from 35K to £80K to benefit only12% of income earners.

     (Approx. 3.6m people) at a cost of £9bn.pa.

b) Raise NI threshold to 12.5K to benefit 2.4m people (8% of income earners) at a cost of £11bn. pa.

c) Look at the raising the already very generous pension tax relief for high earners able to place £40k pa. into a private pension. This already cost tax revenue £41bn. pa! A huge benefits cosseting the rich and is set to go higher.

On top of these ‘promises’, he and the cabinet are embarking on utilising the Brexit war chest ‘dividend’; spending it pay for a “No Deal” in preparation and prepping the public to fall into line to acquiesce with the Conservative Party of a deliberately caused legal inevitability.

What all this means is that somewhere the compounded costs of all governmental expenditure (which is the people’s money) has to fall onto the tax payer eventually, softened initially by raising deficit (PSBR) and a burgeoning long term debt; in effect predictable higher taxes and extreme pressure on inflationary factors and the value of the pound which has already been devalued since 2008 by 30% and likely to fall more. One might contend that at his current phase of madness, shared by many others supporters, that are wilfully blinded to the  damage they are to cause and defy to know better, one may be witnessing the final braking of an illusionary established financial bedrock of the economy with low income growth, low investment, low productivity, dysfunctional wealth dispersal, shrinking GDP, negative balance of payments, a likely fracturing of the ‘Union’ and a calculated rejection of advantages by trading partners. One can make a leap of similarity here on the basis of ‘having been there and done it’, though some with a lighter view may oppose comparisons; in some ways the perverse success of a Conservative Democratic Unionist Party’s overbearing Brexit, can be the beginning of a not dissimilar situation to the late 60s/70s; the country was heading towards being bust, taxes were ‘higher’ than now to cover the economy under-performances despite the country’s trading and commonwealth links and it was clear the country was being left behind in global growth; things were not economically optimistic and two things saved it, oil and joining the EEC. Well the leaves are not out yet, so, it’s so far so good!

Much is often said, in recent years, about taking the low income earners out of the tax net, but in doing so, with the increase in taxable threshold, it is of marginal benefit to basic tax payers but does considerable more for higher earners. For it does not matter how little tax there is on average income, for those on poor / poverty middle incomes; as a portion of spending power, taking all outgoings into account, they still pay a disproportionate amount of the overall tax take in the UK. And in this they are effectively forced to pay, by various tax raising measure that they cannot avoid, what might be argued a poverty tax for being in that resource deficiency state. Little in this is likely to change without a dramatic shift in the awareness of the populace. And as one has said, discussion about inequitable tax is often shut down by suggestion that is it disgraceful to deny the middle income earners (like doctors, teachers, nurses, police etc) a reduced deserving tax benefit, which ‘of course’ helps (incidentally) the lower paid as well. Until things get demonstrable worse and people realise that they have been lied to, swindled and used by the political establishment owned by the affluent, as a ‘milch cow’ to fund the majority of taxes paid; a forceful demand for a change cannot happen.

What is slowly becoming an issue, which more people are becoming aware of, is the ability of wealth and business to avoid paying tax on extracted profits while the burden of supporting a county’s infrastructures, used by them, is being carried by a declining income taxable structure. This shift has occurred quickly but has been largely ignored by the free market governments particularly in the UK, sold as it is on the idea of unfettered regulation  and low taxation of which the conservative party is a serious exponent but the weight of opinion is moving against this relaxed stance. Although not directly related to this the paucity of action by governments over decades, in addressing the imbalanced in the economy, was touched on in a recent discussion with John Mc Donald and Andrew Marr's political show in June when AM asked J mc. D ‘if he had friends in the conservative party’; to which he replied, after a pause, ‘he had worked with a few on cross party issues’, not as friends and “cannot forgive the conservative party for what they have done to the country”  referencing ongoing class structure and the aspiring of wealth for conservative party supporters.

In this he makes reference to the disparity of wealth and tax which is an expanding problem always rejected by the conservative party even though it is a problem that at some stage has to be dealt with, if only for two reasons, one: the ability of a country to afford its place in the world is being paid by a stagnant income reducing work force and two: the wealth of a country is being siphoned off into a smaller untaxed (or low) cadre of individuals and business.

Government will have little choice but embark on establishing a more aggressive tax structure to stop the exportation of extracted untaxed profits and although the UK government has in the past vetoed in the EU, a proposal similar to a “Tobin” tax, one country has decided to force the issue by independently deciding to act.

In France, it is pushing hard to bring in a tax called the GAFA tax, which is an acronym of the US companies it initially wants to target: Google, Apple, Facebook and Amazon, a total of some 30 companies will also be affected. The proposed tax levy will impose a 3% revenue tax on digital companies with global revenues above €750 million and above €25 million in France. This is being challenged and threatened with trade reprisals by the US Trump regime which France is resisting and seeking EU wide legislation in support. It, like others, sees the stability of its long term economy under increasing threat of collapse with a population that is slowly being impoverished and unwilling to accept deprivation to being ‘left behind’ without a fight. This repositioning of taxes against corporate and individual evasions ought to be the start of progressive tax measures against (what one calls) business and capital usury as it is doubtful that any modern country can overlook the potential of civil unrest of increasing disfranchised populace, in allowing a race to the bottom of the cheapest, flexible, workless and disregarded labour.  

The old Labour party policy of using tax for the redistribution of income and wealth has been proved very successful but achieved principally by the Conservative DU Party by shifting the overall tax burden from the affluent wealthy to the working poor, at the same time presiding over a shift in inequitable income (though the Labour Party played a part in this shift as well). Wealth holding and the easy accumulation of overall prosperity is easy with accumulated capital; something that is financed by the exploitation of resources from the same working underprivileged, to the richest!     

                                           

So, the rich pips just aren't being squeezed or squeaking at all, they know when they are doing well and the poor pips are not squeaking enough, ignorant as they are of being squeezed dry to subsidise the rich, wealthy, businesses and outright evasion. This problem of rich and wealthy vs. the expanding poor is not going to be corrected with minuscule manipulation of the tax system. From low wage earner to middle income earners the tax regime is against them, made profoundly more distorted with the level of income spread over the past 30 years intensified with the changes in volume and shape of labour applications, becoming widely divergent with more capital and asset resources flowing wealth into the hands of the top 12%, and a greater proportion of available remuneration increasingly sucked up by them.

© Renot

317191520

(1) https://wordhistories.net/2017/09/10/until-pips-squeak-origin

(2) Wikipedia

(3) https://www.ifs.org.uk/publications